Renewable energy and the politics of subsidiesNov 09 - Guardian (UK)
It’s becoming tiresome hearing government ministers justify their cuts to renewable energy subsidies on the basis that industries must “stand on their own two feet” ( Energy minister ‘open-minded’ about UK solar subsidy cuts , 20 October). Energy minister Andrea Leadsom’s assertion that “I don’t think anyone here would advocate an industry that only survives because of a subsidy paid by the billpayer” may sound vaguely reasonable if a) we didn’t have the tricky little problem of climate change to contend with, and b) other energy industries weren’t also subsidised. Your article rightly highlights the enormous subsidies for nuclear, but doesn’t mention those also being given to the fossil fuel industry. According to the IMF , the UK will spend approximately £26bn on
fossil fuel subsidies this year, factoring in new World Health
Organisation estimates on harm to health from pollution exposure. By
comparison, Department of Energy and Climate Change figures show the
cost of supporting renewables in 2014-15 was £3.5bn, expected to rise to
£4.3bn in 2015-16. Put another way, every UK citizen pays £412 in fossil
fuel subsidies, and just £55 for renewables. How are we ever to wean
ourselves off fossil fuels when government policy is so skewed in their
favour? • Two tests should dominate the energy supply debate but rarely do: the first is the need to move as rapidly as possible to a low-carbon-based generation system and the second is to develop and maintain supply to both domestic consumers and to industry. Most discussions have, however, been dominated by cost of generation and/or supply. The renewables market is heavily distorted by subsidies meaning that actual costs are considerably less than transparent. Arthur Neslen’s article on solar power ( Moroccans build big in bold attempt to become solar superpower , 26 October) and your editorial on the same topic ( also 26 October ) do little to clarify this situation. The construction costs of solar power in Morocco are given as $9bn for some 560MW versus $38bn for the new power station at Hinkley for 3,240MW, which suggests that the cost argument against nuclear energy may not be as clear cut as has been stated. The Moroccan government has not disclosed the level of subsidies for consumers. The Guardian’s enthusiasm for new nuclear has been chilly to say the least ( Hinkley Point C fails on cost and reliability but the show must go on , 21 September). This has generally hinged on the “strike” cost of £92.50 per MWh for new nuclear which is around twice the current wholesale cost: however, today’s costs are weighted heavily in favour of cheap gas and coal which fail any low-carbon test. Renewables for at least some of the time fail the supply test. The UK government is attempting to meet both tests by building new
nuclear: the cost (and any subsidies to the generating industry) have to
be met either from general taxation or by higher prices for electricity.
Neither is going to be popular, but clear cut (and cheaper) alternatives
are not immediately apparent. • There are two myths in your editorial First, you state that “subsidies for solar favour wealthier homes”. A quick tour around Newcastle , Gateshead and North Tyneside would show you that there are significant council and housing association programmes to alleviate fuel poverty in poor areas, with insulation improvements and solar panels on swaths of houses. There are also many community centres and schools that benefit from solar panels across the country. Second, you quote the “cheaper but unloved onshore wind”. Your own
survey in May 2014 showed 48% in favour of onshore wind and only 19% in
favour of fracking. Some surveys have showed 80% backing wind power. The
Tory government is using divisive tactics to make people see renewables
as a lifestyle choice rather than a vital programme of development for
our future. They have stuffed Decc with climate-change deniers focused
on supporting the big six energy companies and their relentless burning
of fossil fuels. Please be careful not to repeat the myths they generate
to obscure the destruction they are perpetrating on us all. • In the same way that the government have laid the blame on the poor
and disadvantaged for the nation’s money problems, they are now
insinuating that it solar panel users are responsible for our exorbitant
energy prices ( There’s outrage over steel, but we should be furious
over solar power , 23 October). This after their feeble attempts to
regulate the real villains – the big energy companies. I am a
70-year-old environmentalist pensioner and borrowed to install the 4.9kW
array on my roof because it is the right thing to do. I am guaranteed my
feed-in tariff for the next 20 years should I make it until then, but I
am still paying for the grid electricity I use plus the monthly standing
charge to my energy company, so am not getting anything for nothing –
except that which nature provides, which is free to us all to take
advantage of. Instead of this government trying to destroy the
aspirations of people like me they should be setting an example by
having solar installed at the Palace of Westminster and all other
government buildings. The return on their investments, which includes
their energy-cost savings, would go a long way to help reduce the
“deficit”. • Patrick Barkham falls for the old tropes of conventional economic thinking ( How solar power lost its shine , G2, 21 October). The global economy is based on the assumption that nature is infinite and thus can be exploited indefinitely without cost. Under this assumption, burning all available fossil fuel without regard to the pollution costs involved is entirely reasonable as, by inference, nature must have an infinite capacity to absorb that pollution. There was a level of human population and economic activity when that was a workable assumption but it is clearly not now and will become increasingly ridiculous as economic growth continues. The feed-in tariff it is not a subsidy but rather an attempt to correct the perverse incentive to destroy the future livability of the planet that is inherent in conventional economics. A small charge is made on behaviour that is undesirable (using electricity produced from burning fossil fuel) and used as an incentive to encourage behaviour that is desirable (producing electricity from clean resources). That the money involved appears as government spending is a political choice, not an “economic reality”. In the same way, “grid parity” between generation costs of solar and fossil fuelled electricity could quickly be achieved by making fossil fuel use pay for the pollution it causes (eg via a “carbon tax”). “The economy’ is an important description of human activity and is
subject to rules, regulation and social norms of what we consider to be
a “good” use of resources. Climate change is forcing us to face up to
the reality of a finite planet and how much “wealth” can be generated
today at the expense of future generations. The row over the FIT is
about much more than mere subsidy levels; it is a fundamental test of
the government’s commitment to our children. • Join the debate – email guardian.letters@theguardian.com • Two letters above were amended on 30 October 2015 . Earlier versions used units of “MWhr” instead of MWh, and “Kwh” instead of kWh. Further amendments were made on 9 November 2015 , correcting “half the current wholesale cost” to “twice the current wholesale cost”, and “kWh” to “kW”. http://www.energycentral.com/functional/news/news_detail.cfm?did=37920693 |